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Home Health Agency Prospective Payment System Updates (HH PPS)

Federal/ Medicare

During 2012, the Centers for Medicare & Medicaid Services (CMS) proposed a rule that would update the Home Health Prospective Payment System (HH PPS) rates. This update included the national standardized 60-day episode rates, the national per-visit rates, the low-utilization payment amount (LUPA), and outlier payments under the Medicare prospective payment system for home health agencies effective January 1, 2013.

Under the propose rule the final National 60-Day Episode Payment Rate effective January 1, 2013 would have increased by $3.43 to $2,141.95.  However, upon the release of the final rule in November, 2012 the CY13 national standardized 60-Day Episode Payment Rate decreased to $2,137.73.  In the development of the HH PPS, non-routine medical supplies (NRS) were accounted for by attributing a specified dollar limit to the standardized episode payment (final rule conversion factor for CY13 is $53.97). CMS has acknowledged that in general, NRS use is unevenly distributed across episodes of care in home health, therefore CMS applies a severity adjustment to the NRS portion of the HH PPS standardized episode payment and will continue to use the six-severity group level approach when adjusting payment amounts in future years.

It should also be noted that Home Health Agencies (HHAs) that do not submit quality data will suffer a 2.0% payment reduction on the full proposed home health market basket update, which is 1.30% for CY 2013, bringing the 60-Day Episode Payment Rate down to $2,095.52 after the penalty.  There were no changes to the outlier payment thresholds and a slight decrease to the per visit rates (0.2%) as proposed in the first rate update release.  The low-utilization payment amount add-on final rule was $95.85, which was $1.70 higher than the proposed CY13 rate.

Massachusetts/ Medicaid

Medicaid in Massachusetts pays per-visit rates as outlined in 114.3 CMR 50.00. Rates of payment that apply to home health services rendered by eligible providers to publicly-aided individuals have not changed since 2008.  The allowable fees established for services provided to publicly-aided individuals will apply to all home health services regardless of the type of program under which the governmental unit is purchasing the services.  Rates of payment for authorized home health services will be the lower of the eligible provider's usual fee to patients other than publicly-aided patients or the schedule of rates set forth in 114.3 CMR 50.04.

For more detailed information regarding Medicare & Medicaid payments to home health agencies follow the attached link to F&D's Technical Bulletin for Home Health Agencies. 

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